
First Quarter 2025 Highlights The company reported strong Q1 2025 results, featuring significant year-over-year profit growth and continued expansion in net interest margin | Metric | Q1 2025 Value | YoY Change | | :--- | :--- | :--- | | Net Income | $4.4 million | +44% | | Diluted EPS | $0.68 | +45% ($0.47 in Q1 2024) | | Pre-Provision, Pre-Tax Net Revenue (PPNR) | $6.2 million | +24% ($5.0M in Q1 2024) | | Return on Average Equity (ROE) | 10.37% | N/A | | Return on Average Assets (ROA) | 0.86% | N/A | | Book Value Per Share | $25.86 | N/A | - Net Interest Margin (NIM) increased by 7 bps compared to the prior quarter and 28 bps compared to Q1 2024, marking the fourth consecutive quarter of NIM expansion6 - Noninterest bearing (NIB) deposit balances grew by $18 million, a 7% increase during the quarter, reflecting a positive trajectory in growing core deposits46 - The company executed its strategy of contracting its residential loan portfolio by selling two portfolios totaling $18.1 million, redeploying proceeds into higher-yielding commercial loans6 - Recent developments include the appointment of Matt Tuohey as Market President for Northeast Ohio, a cash dividend declaration of $0.07 per common share, and securing a new $10 million revolving line of credit for potential Tier 1 capital injection6 Management Commentary Management highlights a solid Q1 performance, strategic success in commercial banking, and effective talent acquisition as key drivers for future growth Q1 Performance and Outlook Management views Q1's strong net income and deposit growth as a solid foundation, anticipating further cost reductions - Q1 Net Income of $4.4 million, which included a $600k provision expense, is considered a solid base for 2025 performance4 - The company is pleased with the 7% quarterly growth in NIB deposits4 - Management expects future opportunities to lower the Cost of Funds and Deposit costs, with potential Fed rate reductions providing additional momentum5 Commercial Banking Strategy The commercial banking group achieved significant loan growth by strategically reallocating capital from residential mortgages - The Commercial Banking division generated over $50 million in net loan growth in Q1 20257 - The strategy of shrinking the residential mortgage portfolio to fund growth in commercial lending yielded the intended results during the quarter8 - The bank has implemented interest rate floors into some floating-rate loans to help sustain or support margins8 Talent Acquisition Successful recruitment of experienced commercial bankers is expanding the bank's presence and setting the stage for quality growth - CFBank is attracting experienced Commercial Bankers from Regional Banks, drawn by its entrepreneurial business approach9 - This recruitment success is expanding the Commercial Banking teams and presence in all 5 regional metro markets served by the bank10 Financial Performance Analysis This section details the company's income statement performance, including analysis of net interest income, noninterest items, and taxes Overview of Results Net income was $4.4 million, or $0.68 per diluted share, a 44% increase compared to $3.1 million in Q1 2024 | Metric ($ in millions) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income | $4.4 | $4.4 | $3.1 | | Diluted EPS | $0.68 | $0.68 | $0.47 | | PPNR | $6.2 | $6.5 | $5.0 | Net Interest Income and Net Interest Margin (NIM) Net interest income grew 14.4% year-over-year to $12.9 million, driven by lower interest expense and a 28 basis point expansion in NIM | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $12.9M | $12.5M | $11.3M | | Net Interest Margin (NIM) | 2.64% | 2.57% | 2.36% | - The QoQ increase in net interest income was primarily due to a $1.2 million decrease in interest expense, driven by a 26 bps drop in the cost of funds on interest-bearing liabilities13 - The YoY increase was driven by a $1.5 million decrease in interest expense, attributed to a 37 bps decline in the average cost of funds14 Noninterest Income Noninterest income totaled $1.2 million, decreasing 16.6% sequentially but increasing 33.3% year-over-year - Noninterest income decreased by $240,000 (16.6%) compared to Q4 2024, primarily due to a $103,000 loss on a security sale and an $18,000 loss on commercial loan sales15 - Compared to Q1 2024, noninterest income increased by $301,000 (33.3%), mainly from a $457,000 increase in other noninterest income16 | Notional Amount of Loans Sold (in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Amount | $27,277 | $15,670 | $9,037 | Noninterest Expense Noninterest expense was $8.0 million, rising both sequentially and year-over-year primarily due to higher salaries and benefits - Noninterest expense increased by $521,000 (7.0%) QoQ, mainly due to a $628,000 increase in salaries and benefits, which included a $234,000 seasonal increase in payroll taxes18 - YoY, noninterest expense rose by $767,000 (10.7%), also driven by a $675,000 increase in salaries and benefits related to higher incentive accruals19 Income Tax Expense Income tax expense was $1.1 million, resulting in an effective tax rate of 20.6% for the quarter | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Income Tax Expense | $1.1M | $748k | $695k | | Effective Tax Rate | 20.6% | 14.5% | 18.5% | Balance Sheet and Asset Quality The analysis covers the company's balance sheet composition, including loan growth, stable asset quality, deposit trends, and capital adequacy Loans and Loans Held For Sale Net loans and leases grew by $28.1 million to $1.8 billion, driven by commercial real estate and construction lending - Net loans and leases increased by 1.6% from December 31, 2024, to $1.8 billion21 - Loan growth was led by a $47.7 million increase in commercial real estate and a $6.4 million increase in construction loans21 - The decrease in single-family residential loans was primarily due to the sale of two loan portfolios totaling $18.1 million21 Asset Quality Asset quality remained stable with nonaccrual loans steady at $14.5 million and minimal net charge-offs | Asset Quality Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Nonaccrual loans | $14.5M (0.82% of loans) | $14.5M (0.87% of loans) | | Allowance for credit losses (ACL) | $17.8M | $17.5M | | ACL to total loans ratio | 1.01% | 1.00% | - Provision for credit losses expense was $582,000 for Q1 2025, a decrease from $1.4 million in Q4 2024 and $1.2 million in Q1 202426 - Net charge-offs for Q1 2025 were only $23,00026 Deposits Total deposits increased by $27.9 million, driven by a significant $18.1 million rise in noninterest-bearing balances - Total deposits grew 1.6% QoQ to $1.78 billion at March 31, 202527 - The increase was primarily due to an $18.1 million rise in noninterest-bearing accounts27 - Approximately 31.1% of deposit balances exceeded the FDIC insurance limit, up from 29.8% at the end of the prior quarter28 Borrowings FHLB advances and other debt remained stable at $92.7 million as of March 31, 2025 - FHLB advances and other debt totaled $92.7 million at March 31, 2025, consistent with the balance at December 31, 202429 Capital Stockholders' equity increased by $4.3 million to $172.7 million, and all regulatory capital ratios remained strong - Stockholders' equity grew by 2.5% during the quarter to $172.7 million, mainly due to retained earnings30 | Regulatory Capital Ratios (CFBank) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tier 1 leverage ratio | 10.55% | 10.33% | | Common equity tier 1 capital ratio | 12.59% | 12.45% | | Total risk-based capital ratio | 13.76% | 13.60% | Financial Statements & Data This section presents the core consolidated financial statements and supplementary data tables for detailed analysis Consolidated Statements of Income The company's net income increased 44% year-over-year, driven by a 14% rise in net interest income | ($ in thousands) | 3 Months Ended Mar 31, 2025 | 3 Months Ended Mar 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $12,909 | $11,284 | 14% | | Provision for credit losses | $582 | $1,237 | -53% | | Noninterest income | $1,206 | $905 | 33% | | Noninterest expense | $7,954 | $7,187 | 11% | | Net income | $4,430 | $3,070 | 44% | Consolidated Statements of Financial Condition Total assets stood at $2.09 billion, supported by $1.78 billion in deposits and $172.7 million in stockholders' equity | ($ in thousands) | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total assets | $2,094,681 | $2,065,523 | | Loans and leases, net | $1,750,139 | $1,722,019 | | Total deposits | $1,783,689 | $1,755,795 | | Total liabilities | $1,921,999 | $1,897,086 | | Stockholders' equity | $172,682 | $168,437 | Average Balance Sheet and Yield Analysis The net interest margin expanded to 2.64% in Q1 2025, continuing its upward trend from prior quarters | For Three Months Ended | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Avg. Yield on Interest-Earning Assets | 5.97% | 6.16% | 6.07% | | Avg. Rate on Interest-Bearing Liabilities | 4.14% | 4.40% | 4.51% | | Net Interest Rate Spread | 1.83% | 1.76% | 1.56% | | Net Interest Margin | 2.64% | 2.57% | 2.36% | Consolidated Financial Highlights Key financial metrics show consistent quarterly improvement in net interest margin and steady growth in book value per share - The financial highlights table shows a consistent quarterly improvement in Net Interest Margin, from 2.36% in Q1 2024 to 2.64% in Q1 202540 - Book value per common share has steadily increased over the past five quarters, reaching $25.86 at March 31, 202540 Appendix The appendix includes non-GAAP reconciliations, company information, and forward-looking statement disclaimers Use of Non-GAAP Financial Measures The company uses Pre-Provision, Pre-Tax Net Revenue (PPNR) to better show ongoing operational performance GAAP to Non-GAAP Reconciliation (PPNR) | ($ in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net income | $4,430 | $4,417 | $3,070 | | Add: Provision for credit losses | $582 | $1,381 | $1,237 | | Add: Income tax expense | $1,149 | $748 | $695 | | Pre-provision, pre-tax net revenue | $6,161 | $6,546 | $5,002 | About CF Bankshares Inc. and CFBank CF Bankshares Inc. is the holding company for CFBank, a boutique Commercial bank operating in Ohio and Indiana - CFBank is a boutique Commercial bank operating in Columbus, Cleveland, Cincinnati, Akron (OH), and Indianapolis (IN)32 - The bank focuses on providing commercial, retail, and mortgage lending services to closely held businesses and entrepreneurs, differentiating itself with individualized service and direct access to decision-makers33 Forward-Looking Statements This section cautions that the press release contains forward-looking statements subject to various risks and uncertainties - The press release contains forward-looking statements regarding projections, plans, and future economic performance, which are subject to risks and uncertainties34 - The company undertakes no obligation to update forward-looking statements, which speak only as of the date of the release35